Household saving is defined as the difference between a household’s disposable income (wages, income of the self-employed and net property income) and its consumption (expenditures on goods and services.)

UK Trade Deficit Narrows in Third Quarter

Advertisement

November 09, 2016

By Wiktor Szary and Jason Douglas

LONDON--The U.K.'s trade deficit narrowed in the third quarter, official data showed Wednesday, although statisticians said there has been little evidence so far that a slide in the pound since the country voted to leave the European Union has given much of a boost to exports.

The U.K.'s deficit in goods trade narrowed to 33.2 billion pounds ($41.2 billion) in the third quarter from GBP34.7 billion in the second, the Office for National Statistics said.

Most of the shrinkage occurred in July; the deficit widened again in both August and September, ONS data showed. September's deficit was GBP12.7 billion, compared with a shortfall between exports and imports of GBP11.1billion in August.

Sterling has fallen sharply since the U.K. chose to exit the EU in June. Surveys of manufacturers suggested the fall promised to lift exports, as British products became cheaper for overseas buyers. Yet ONS officials said there's little evidence for this in the latest batch of data.

As Britain prepares to extricate itself from the EU, its largest trading partner, trade flows will likely become a closely watched indicator of the government's success in forging and strengthening the U.K.'s global economic relations. Economists caution, however, that monthly trade data can be volatile and it may be months before any clear pattern emerges.

Including services, the nation's overall deficit with the rest of the world narrowed to GBP11 billion in the three months through September, from GBP12.7 billion in the second quarter, the ONS said.

The shrinking in the deficit was driven by growth in exports of 3.4%, which outpaceda 2% rise in imports. Among the best performing exports were cars, which rose to a quarterly record of GBP7.8 billion.

Write to Wiktor Szary at wiktor.szary@wsj.com and Jason Douglas at jason.douglas@wsj.com